Freddie Mac and Fannie Mae experienced a substantial increase in their net income for the first quarter, according to the FHFA's Quarterly Performance Report of the Housing GSEs released Monday. The combined first quarter earnings of Freddie Mac and Fannie Mae totaled $2.4 billion in the first quarter this year, compared to $1.5 billion in the fourth quarter of last year. A drop in long-term interest rates drove derivatives down by $4.2 billion for both GSEs during the first quarter.
The average loan-to-value ratio for new business decreased at both Enterprises as refinances surpassed purchase mortgage originations, which generally have higher LTV ratios. Borrowers were more inclined to use the Enterprises’ refinance programs that focus mainly on deeply underwater borrowers, including HARP. REO inventory dropped by 10 percent to about 102 thousand properties for the first quarter from 113,000 properties at the end of the fourth quarter.
An independent monitor of the 2012 National Mortgage Settlement revealed in a summary of five reports he filed in a federal court that Citi failed one of the compliance tests in the second half of 2014.The summary includes updates on compliance with NMS mortgage servicing rules by Bank of America, Chase, Citi, Green Tree, and Wells Fargo, during Q3 and Q4 of 2014. For the failed Citi metric, the monitor reported that the bank implemented an approved corrective action plan and cured the fail in the following quarter.